October 5, 2021
Lawmakers are set to grill the leaders of financial watchdog agencies over the government’s decision to levy income taxes on cryptocurrency trading starting in 2022. Under the new tax policy, people whose annual cryptocurrency trading revenues top 2.5 million won ($2,100) will be subject to a tax equivalent to 20 percent of the income. The decision, however, is still widely considered to be hasty, at a time when Korea’s cryptocurrency market is still in its infancy and faces confusion amid a set of tough regulations imposed by financial authorities.
The central point is whether Finance Minister Hong Nam-ki will be able to justify the crypto taxation during an upcoming National Assembly audit. But criticism over the tax plan is growing even within the ruling camp. Rep. Yoo Dong-soo of the ruling Democratic Party of Korea (DPK) said, “”The government needs to review the planned implementation of the policy, as it still lacks systematic enough details to win over the public and crypto traders. Under the current plan, only those who report their revenue will have to pay taxes, which is not fair.”
Financial Services Commission (FSC) Chairman Koh Seung-beom will also attend the upcoming Assembly audit for the first time since taking office in August. Koh will face questioning on the watchdog’s plan to minimize any damage from its ever-toughening set of household lending rules. According to data from the Bank of Korea, the nation’s total household credit topped a record 1,800 trillion won as of the end of June this year. Citing the rapid rise in household debt, Koh has reiterated the need to control the pace through regulations.
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